Property sector leaders say the Scottish government’s “shift in narrative” will go some way to addressing the housing emergency.
Scrutiny of the Housing (Scotland) Bill is now reaching a critical stage and has so far yielded a key change to rent controls demanded by the industry, along with an acceptance of a broad approach to satisfying demand by embracing all types of housing.
As the Scottish Parliament starts its Stage 3 line-by-line consideration of the legislation, Housing Secretary Màiri McAllan has spoken of creating a “gold standard” homeless prevention system.
She told parliament at the beginning of September that the mid-market and build-to-rent sectors would be exempt from rent controls, seen as a significant concession by developers and landlords.
However, there will be a general commitment to rent controls, capping increases at the rate of inflation plus 1 percentage point. This aims to keep rents affordable – a move described by the Tories as “reckless”.
Today, Ms McAllan said: “We already have some of the strongest homeless rights in the world, however this legislation will go even further to protect and support people threatened with homelessness.
“The actions we have taken in just the past month demonstrate our determination to tackle the housing emergency.
“A few weeks ago, I published an Action Plan backed by up to nearly £5bn and including a major affordable house building programme. This week we are set to pass groundbreaking legislation to prevent homelessness, improve standards in rental homes and keep rents affordable for tenants… through a system of long-term rent controls.”
The SPF said it welcomed the Scottish Government’s shift in narrative as the Bill has progressed, and the wider recognition that the solution to Scotland’s Housing Emergency lies in “a cross-tenure approach that understands the critical role to be played by the private sector”.
It described the recent move to exempt Build to Rent (BTR) and Mid-Market Rent (MMR) housing as a “positive and reassuring step for the industry, offering long-awaited clarity for those investing in new homes for rent, which are vital to expanding Scotland’s rental housing supply, increasing choice for would-be tenants.
“With Stage 3 of the Bill due this week, we now await further clarity on other aspects of the legislation and hope that a pragmatic amended Bill receives cross-party support to effectively address Scotland’s housing emergency.”
The Scottish Conservatives’ housing spokesperson Meghan Gallacher criticised the SNP’s continued commitment to permanent rent controls.
Despite the SPF’s acknowledgement of the steps taken by the minister to address their concerns, Ms Gallacher insisted the move will worsen the hostile environment for developers, reducing the housing supply even further and leading to billions in lost investment for the sector.
She said her party would vote against the bill. “The SNP’s reckless obsession with rent controls will only deepen the housing emergency they have created in Scotland,” she said.
Greens want cap on second homes lifted
The Scottish Greens will move an amendment to the bill to allow councils unlimited scope to impose taxes on second homes which could persuade owners to sell.
The Greens say their proposal for an uncapped increase in the additional dwelling supplement would prevent the wealthy “hoarding” properties. It would also apply to empty homes.
The party is confident that its proposed amendment to the Bill today will win ministers’ backing. If it succeeds, local authorities will have the power to increase rates on empty housing or holiday homes by as much as they want.
Since April last year councils have been able to double council tax charges on second homes and the vast majority have implemented that policy.
Ross Greer, the Greens’ co-leader, said the ownership of second homes over the past decade, in areas such as Edinburgh, Arran and Skye, had priced locals out of the market.
The Greens also want a ban on evictions for the first 12 months of a tenancy, a permanent end to winter evictions and fines for landlords who charge illegal rent increases.
The party says rents should be frozen where the property doesn’t meet minimum energy efficiency and other standards. It has also called for an end to property tax breaks enjoyed by the King and “other wealthy elites”.
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